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Nokia to pay no property tax for 30 years in Romania

( dpa ) - Finnish mobile phone producer Nokia will not have to pay property tax for the next 30 years on its new facilities in Romania, the director of the company that runs the industrial park in which Nokia is located said Thursday.

If Nokia left the park before the 30 years were up, it would have to pay back the taxes on the land and factories retrospectively, said Viorel Gavrea, whose company Tetarom also owns the Nokia site in Jucu, near Cluj.

The agreement would be formally written into a contract with the Romanian authorities in two months' time, Gavrea said.

All other investors in the industrial park will receive the same tax break, Gavrea said.

Nokia came in for bitter criticism in Germany over its decision to move production of mobile-phone handsets from Bochum to Jucu.

Property tax in Romania is set and collected by local councils. In Jucu it is 1 per cent of the value of the property.

Nokia will still have to pay tax on its profits, which is collected by the central government in Bucharest, the Romanian authorities said previously.

Romania has a flat corporate tax rate of 16 per cent.

When the contract with Nokia is signed in March, the Jucu site will officially receive its designation as an industrial park, Gavrea said.

Nokia has 90 hectares in the 159-hectare park.

Four Nokia suppliers have also indicated that they wish to locate in the park.

Tetarom plans to expand the park by 170 hectares, more than doubling its size.